Oil prices extend their losses on Thursday after falling about 2 per cent the previous day amid concerns over the US credit rating downgrade and a strong dollar.
Brent, the benchmark for two thirds of the world’s oil, was trading 0.17 per cent lower at $83.06 a barrel at 3.57pm UAE time, while West Texas Intermediate, the gauge that tracks US crude, was down 0.13 per cent at $79.39 per barrel.
On Wednesday, Brent settled 2.01 per cent lower at $83.20 a barrel while WTI was down 2.31 per cent at $79.49.
On Tuesday, rating agency Fitch downgraded the US's long-term foreign currency ratings to “AA+” from “AAA”, citing fiscal deterioration over the next three years, growing general government debt, and the “erosion of governance” that has resulted in repeated debt limit standoffs and last-minute resolutions.
The downgrade “should not have been a surprise for investors that have been following Fitch’s comments, but the timing surely caught everyone off guard”, Edward Moya, senior market analyst at Oanda, said.
Futures were supported by a record drop in US crude stocks.
US crude inventories, an indicator of fuel demand, fell by 17 million barrels to 439.8 million barrels last week, the lowest levels since 1985, according to the US Energy Information Administration.
Analysts polled by Reuters were expecting an inventory drawdown of 1.4 million barrels.
Meanwhile, petroleum stocks fell by 1.5 million barrels in the week that ended on July 28, while distillate inventories decreased by 800,000 barrels.
“A strong dollar is getting in oil’s way, but that should only lead to limited downside given how good both the supply and demand fundamentals have become,” Mr Moya said.
The US Dollar Index – a measure of its value against a weighted basket of major currencies – has gained 1 per cent over the past five days. It was marginally up at 102.66 on Thursday.
A stronger greenback makes dollar-denominated oil more expensive for holders of other currencies.
Despite the recent sharp rise in crude prices, BMI, a unit of Fitch Solutions, has held its view of $80 Brent for 2023. It expects prices to rise to $83 a barrel next year.
“As anticipated, oil prices have strengthened heading into the third quarter, supported by seasonally higher demand, unilateral cutbacks by Saudi Arabia and weakening Russian exports,” BMI said in a research note on Wednesday.
“Global economic activity is slowing, and we expect to see short and shallow recessions in both the eurozone and the US, which will erode physical oil demand and weigh on sentiment,” the research firm said.
“However, the slowdown has been widely anticipated and should, by now, have largely been priced into Brent.”
Last week, the International Monetary Fund marginally raised its forecast for the global economy for this year and the next but said it was “not out of the woods” due to headwinds that persist, even though the recovery is on track.
The fund revised its earlier forecast for this year upwards, raising it by 0.2 percentage points to 3 per cent, although lower than the 3.5 per cent expansion recorded in 2022. It is projecting a similar pace of growth in 2024.
The Opec+ alliance of 23-oil producing countries is unlikely to make any changes to its output policy when it meets on August 4.
At the June 4 meeting, the group agreed to keep its current production curbs, totalling 3.66 million barrels per day, in place until the end of 2024.
Saudi Arabia, which announced the extension of its unilateral production cut of 1 million bpd until August on July 3, is expected to maintain the output cut through September, according to Goldman Sachs.
"After a remarkable run in July, oil’s rally has taken a pause this week on a risk-off tone as Fitch stripped the US of its AAA sovereign credit rating, spurring the US dollar higher," Japanese bank MUFG said in a research note on Thursday.
"Beyond the headwind that elevated oil prices are causing global central banks, diesel – the workhorse of the global economy – is witnessing a rare summertime price rally as refinery outages and heatwaves are curbing supply."
MUFG said that a "deeper" deficit than the 1.3 million bpd estimated by the lender would be required to drive higher oil prices.
"While China’s performance leaves plenty of room for improvement, we note that the country’s oil inventories are approaching all-time highs, and are likely to be drawn down should demand outperform," the bank said.
Schedule
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SERIES INFO
Schedule:
All matches at the Harare Sports Club
1st ODI, Wed Apr 10
2nd ODI, Fri Apr 12
3rd ODI, Sun Apr 14
4th ODI, Sun Apr 16
UAE squad
Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
Zimbabwe squad
Peter Moor (captain), Solomon Mire, Brian Chari, Regis Chakabva, Sean Williams, Timycen Maruma, Sikandar Raza, Donald Tiripano, Kyle Jarvis, Tendai Chatara, Chris Mpofu, Craig Ervine, Brandon Mavuta, Ainsley Ndlovu, Tony Munyonga, Elton Chigumbura
MATCH INFO
Maratha Arabians 107-8 (10 ovs)
Lyth 21, Lynn 20, McClenaghan 20 no
Qalandars 60-4 (10 ovs)
Malan 32 no, McClenaghan 2-9
Maratha Arabians win by 47 runs
Usain Bolt's World Championships record
2007 Osaka
200m Silver
4x100m relay Silver
2009 Berlin
100m Gold
200m Gold
4x100m relay Gold
2011 Daegu
100m Disqualified in final for false start
200m Gold
4x100m relay Gold
2013 Moscow
100m Gold
200m Gold
4x100m relay Gold
2015 Beijing
100m Gold
200m Gold
4x100m relay Gold
Harry%20%26%20Meghan
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ELiz%20Garbus%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Duke%20and%20Duchess%20of%20Sussex%0D%3Cbr%3E%0D%3Cbr%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A
Teams in the EHL
White Bears, Al Ain Theebs, Dubai Mighty Camels, Abu Dhabi Storms, Abu Dhabi Scorpions and Vipers
UAE currency: the story behind the money in your pockets
Opening weekend Premier League fixtures
Weekend of August 10-13
Arsenal v Manchester City
Bournemouth v Cardiff City
Fulham v Crystal Palace
Huddersfield Town v Chelsea
Liverpool v West Ham United
Manchester United v Leicester City
Newcastle United v Tottenham Hotspur
Southampton v Burnley
Watford v Brighton & Hove Albion
Wolverhampton Wanderers v Everton
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Results
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COMPANY%20PROFILE
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Iraq negotiating over Iran sanctions impact
- US sanctions on Iran’s energy industry and exports took effect on Monday, November 5.
- Washington issued formal waivers to eight buyers of Iranian oil, allowing them to continue limited imports. Iraq did not receive a waiver.
- Iraq’s government is cooperating with the US to contain Iranian influence in the country, and increased Iraqi oil production is helping to make up for Iranian crude that sanctions are blocking from markets, US officials say.
- Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, pumped last month at a record 4.78 million barrels a day, former Oil Minister Jabbar Al-Luaibi said on Oct. 20. Iraq exported 3.83 million barrels a day last month, according to tanker tracking and data from port agents.
- Iraq has been working to restore production at its northern Kirkuk oil field. Kirkuk could add 200,000 barrels a day of oil to Iraq’s total output, Hook said.
- The country stopped trucking Kirkuk oil to Iran about three weeks ago, in line with U.S. sanctions, according to four people with knowledge of the matter who asked not to be identified because they aren’t allowed to speak to media.
- Oil exports from Iran, OPEC’s third-largest supplier, have slumped since President Donald Trump announced in May that he’d reimpose sanctions. Iran shipped about 1.76 million barrels a day in October out of 3.42 million in total production, data compiled by Bloomberg show.
- Benchmark Brent crude fell 47 cents to $72.70 a barrel in London trading at 7:26 a.m. local time. U.S. West Texas Intermediate was 25 cents lower at $62.85 a barrel in New York. WTI held near the lowest level in seven months as concerns of a tightening market eased after the U.S. granted its waivers to buyers of Iranian crude.
LIVERPOOL%20TOP%20SCORERS
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A%20MAN%20FROM%20MOTIHARI
%3Cp%3E%3Cstrong%3EAuthor%3A%20%3C%2Fstrong%3EAbdullah%20Khan%0D%3Cbr%3E%3Cstrong%3EPublisher%3A%20%3C%2Fstrong%3EPenguin%20Random%20House%3Cbr%3E%3Cstrong%3EPages%3A%20%3C%2Fstrong%3E304%0D%3Cbr%3E%3Cstrong%3EAvailable%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3C%2Fp%3E%0A
The biog
Name: Marie Byrne
Nationality: Irish
Favourite film: The Shawshank Redemption
Book: Seagull by Jonathan Livingston
Life lesson: A person is not old until regret takes the place of their dreams
Teaching in coronavirus times
Director: Shady Ali
Cast: Boumi Fouad , Mohamed Tharout and Hisham Ismael
Rating: 3/5
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
How to invest in gold
Investors can tap into the gold price by purchasing physical jewellery, coins and even gold bars, but these need to be stored safely and possibly insured.
A cheaper and more straightforward way to benefit from gold price growth is to buy an exchange-traded fund (ETF).
Most advisers suggest sticking to “physical” ETFs. These hold actual gold bullion, bars and coins in a vault on investors’ behalf. Others do not hold gold but use derivatives to track the price instead, adding an extra layer of risk. The two biggest physical gold ETFs are SPDR Gold Trust and iShares Gold Trust.
Another way to invest in gold’s success is to buy gold mining stocks, but Mr Gravier says this brings added risks and can be more volatile. “They have a serious downside potential should the price consolidate.”
Mr Kyprianou says gold and gold miners are two different asset classes. “One is a commodity and the other is a company stock, which means they behave differently.”
Mining companies are a business, susceptible to other market forces, such as worker availability, health and safety, strikes, debt levels, and so on. “These have nothing to do with gold at all. It means that some companies will survive, others won’t.”
By contrast, when gold is mined, it just sits in a vault. “It doesn’t even rust, which means it retains its value,” Mr Kyprianou says.
You may already have exposure to gold miners in your portfolio, say, through an international ETF or actively managed mutual fund.
You could spread this risk with an actively managed fund that invests in a spread of gold miners, with the best known being BlackRock Gold & General. It is up an incredible 55 per cent over the past year, and 240 per cent over five years. As always, past performance is no guide to the future.
The%20specs
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More from Neighbourhood Watch:
UAE currency: the story behind the money in your pockets
THE%20SPECS
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